Citi swerves in with direct car loan model

Singapore

CITIBANK said on Tuesday that it would offer a direct car loan model starting next month, a move that effectively cuts out car dealers as traditional middlemen in car purchases here. With Citi Direct Car Loan, customers will be able to apply for and receive their in-principle approval for a car loan before they shop for a car.

This deviates from the existing model, under which car companies receive a commission from the bank in exchange for submitting a loan application on behalf of the car buyer. Interest rates from Citi's latest offering start at 1.48 per cent - understood to be lower than the market rate.